Newcastle Permanent has reported a $42.7 million after-tax profit and other positive results in a year the building society's CEO said was "one of our best" ever.
The 2020/21 annual report, to be released today, shows net profit after tax increased 41.6 per cent from the year prior with the building society now holding $11.7 billion in total assets and $1.1 billion in equity.
New home loan approvals were up 51 per cent and totalled a record $2.5 billion. Its home loan portfolio is $9.2 billion, up 3.7 per cent.
Deposits continued to contribute the majority of the society's funding with overall deposit balances rising 5.2 per cent to $8.9 billion.
Newcastle Permanent CEO Bernadette Inglis described the results as "one of our best years ever" amid "uncertain" operating times.
"In the face of challenging headwinds, our continued focus on innovation and supporting our customers led us to deliver a strong and balanced financial result," she said. "While we're pleased that our balanced approach has enabled us to perform so well over the past year, we accept that the long-term effects of historically low interest rates and the global pandemic have not yet been fully felt. We are preparing for a more challenging forward environment characterised by ongoing market and economic uncertainty."
The financial results come ahead of a planned merger with Greater Bank. It was announced in August after the two organisations signed a Memorandum of Understanding, Ms Inglis said both parties continued to conduct due diligence but she expects her board to consider the proposal before the end of the year ahead of a member vote in 2022.
"This year is an incredible opportunity to create one of Australia's largest customer-owned banks," she said. "In a couple of months, our directors and the directors of Greater will make a decision on whether to take it to members. We also have regulatory processes to get through."
Newcastle Permanent was recently named the top Australian-owned financial institution in 2021 by Forbes and also achieved the highest customer-satisfaction score, 94.8 per cent, of all the Australian building societies in a Roy Morgan survey.
Ms Inglis said the awards and results showed "service was core to our ethos".
About 95 per cent of Newcastle Permanent's transactions are "digital", the annual report says, and despite multiple closures in recent years Ms Inglis said branches remained "incredibly important to us moving forward".
"We've started a multi-million dollar investment in redeveloping our branch network," she said. "We've just completed seven of them and we have more in the pipeline."
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